Answer to Question #89529 in Microeconomics for bisma

Question

Calculate the market equilibrium level of price and quantity
Qd = 5000-6P
Qs= 1500+P

Answer 1

Solution: Demand equation, $Q_d = 5000 - 6P$ .......................(1)

Supply equation, $Q_s = 1500 + P$ .........................(2)

In equilibrium, $Q_d = Q_s$

or, $5000 - 6P = 1500 + P$

or, $P = 500$

So, Equilibrium quantity , $Q = Q_d = Q_s = 1500 + 500 = 2000$ [As, P = 500 unit.]

Answer: Equilibrium price is 500 unit and quantity is 2000 unit.